UK Gambling Commission “Constrained by Factors Outside its Control”
by Glenn Baird - February 28, 2020
A report released today by the National Audit Office (NAO) in the UK claims that the UK’s gambling regulator, the UKGC, is struggling to “ensure consumers are protected” as a result of “inflexible funding” and a lack of research on the impact that changes within gambling have on its customers.
The purpose of the report was to identify how successful the UKGC has been in protecting vulnerable gamblers, the reasons for those findings and recommendations to help the Commission move forward.
The report identifies a lack of research in the field as major issue for the regulators. Compared to other addictions, such as alcohol and drug abuse, not enough studies have focused on problem gambling. The vague estimate that gambling addiction costs public services between £260m and £1.16bn is evidence enough that more needs to be done to fully understand the problem. This is hardly news to the UKGC committed to refining their understanding of gambling addiction and how to measure its impact back in 2018.
Whilst the UKGC may have identified the need to improve their understanding of the problem, the NAO concludes that they have not clearly explained how they intend to do so. A specific example they give of this is that the Commission states that they want to see the number of people affected by problem gambling reduced but do not state how much of a reduction is needed before they have been successful, how long that should take and they do not explain what constitutes progress. The NAO then go on to say that the Commission do not clearly explain what a vulnerable gambler may look like or when they are likely to become one.
The report goes on to say that the Commission needs to generate more data in order to both understand the impact of problem gambling and deal with it. The NAO highlights that there is a dearth of information on problem gambling in the UK with 119 local authorities failing to organise inspections last year.
The NAO may well commend the increase in fines that the Commission has dealt out in the last 12 months but they also state that punitive measures must coincide with incentives and that operators are not being suitably rewarded when they do the right thing or take extra measures to go above and beyond the minimum requirements.
The work that the UKGC carries out with other organisations has been, with the report highlighting the need to do so, in part because the Commission is limited with what it can achieve on its own. However, that praise is short lived with further criticism on the perceived lack of measures regarding the UKGC’s own impact within the industry.
Ultimately the biggest problems that the report identified for the UK regulator come from the rapid growth in new technologies that have developed within gambling in the last few years and the Commission’s lack of funding to properly address them. The NAO also argues that the Commission does not properly understand what impact these changes are having on consumers, something that could be attributed to a lack of resources.
The report concludes by recommending that the UKGC develops its definition of vulnerability, looking at examples set by other regulators. The NAO wants to see a more practical goals to help them measure their progress more effectively.
It is also recommended that the Commission enhances its analytics and provides more incentives for those operators that do the right thing.
The report does not only single out the UKGC but also offers recommendations for the Commission and the Department for Digital, Culture, Media & Sport (DCMS) to work on collegiately. This includes:
More research into gambling related harm in the UK
A review of the current dispute resolution services
A review of the current licence model
Response to the Report
Gareth Davies, head of the NAO, said: “The risks to gamblers are changing as technologies develop. Yet the Gambling Commission is a small regulator in a huge and fast-evolving industry. While the commission has made improvements, gambling regulation lags behind the industry.”
Labour MP Carolyn Harris said: “The Gambling Commission is not fit for purpose and Neil McArthur [its chief executive] should resign in the light of this report. The commission is simply not up to the job of regulating the gambling industry, particularly the online sector, parts of which seem to operate like the wild west.”
A spokesperson for the Gambling Commission said the NAO’s report “underlines the constraints that our current funding arrangements presents, and we are developing proposals to discuss this with DCMS”.
Whilst a spokesperson for the DCMS responded by saying: “We must see a reduction in the number of people experiencing harm and we are currently pushing the industry to focus on poor VIP practices, advertising technology and game design,
“We have already announced we will review the Gambling Act to ensure it is fit for the digital age.”
“We have also worked closely with the Gambling Commission over the last year to introduce a wave of tough measures – cutting the maximum stake on fixed-odds betting terminals, introducing tighter age and identity checks for online gambling and banning gambling using credit cards from this April.”